Skeletal muscle tissue possesses a tremendous capacity for regeneration that is compromised upon severe injury and upon aging. Recent clinical studies addressing loss of muscle mass and muscle function in an ageing population conclude that inclusion of fat is a significant contributor to age-related sarcopenia (Goodpasteretal., 2001;Pahorand Kritchevsky, 1998;Sowers etal., 2005). The origins of cells that contribute to increased fat accumulation in skeletal muscle are not known. However, substantial anecdotal evidence exists to suggest that skeletal muscle satellite cells may be involved. These cells, sandwiched between the basal lamina and plasma membrane of myofibers are responsible for maintenance and repair of skeletal muscle tissue, possess stem cell-like properties (Hawke and Garry, 2001;Schultz and McCormick, 1994;Seale et al., 2001;Seale and Rudnicki, 2000;Wagers and Conboy, 2005) and are capable of osteogenic and adipogenic differentiation in culture (Wada et al., 2002). Satellite cells cultured from aged rodents acquire adipogenic phenotypes (Taylor-Jones et al., 2002). Recent published and unpublished work from our laboratory shows that uninjured muscle from syndecan-3 null and syndecan-4 null mice contain excess fat deposition. Moreover, satellite cells from these mice fail to differentiate in culture with syndecan-4 null cells exhibiting a concurrent enhancement of adipogenesis (Cornelison et al., 2004). The syndecans are critical mediators of environmental information and cell adhesion, ideal for recognizing local microenvironments (Tkachenko et al., 2005). Interestingly, microarray data comparing Syndecan-3 and Syndecan-4 null satellite cells with wt cells identifies major changes in focal adesion/actin cytoskeleton signaling transcripts as well as induction of genes that regulate adipogenesis. We propose that similar mechanisms are responsible for accumulation of fat deposits in skeletal muscle from aged wt mice, syndecan-4 null and syndecan-3 null mice where we propose that satellite cells require an environmental niche to maintain myogenic identity and commitment to myogenic differentiation. Alterations in this niche or loss of niche recognition by satellite cells allows them to commit to alternate differentiation pathways. To test this hypothesis, we propose to (i) characterize fat deposition during muscle regeneration in vivo, (ii) identify the cell populations contributing to fat accumulation in vivo, and (iii) assess the role of identified factors in regulating adipogenic conversion of satellite cells in culture.